Unit 1

Question 1

Lean Manufacturing

Answer 1

• Systematic elimination of waste (removal of activities that doesn’t add value to the customer or product)
• developed for Toyota

Question 2

How does lean manufacturing eliminate waste?

Answer 2

• no overproduction
• improved waiting times
• less transportation
• no holding or purchasing of excess inventory
• motion
• uses JIT system
• Defective units

Question 3

Just in time production

Answer 3

• production system driven by demand
• each component produced only in time for the next stage
• concentrates on finding long term solutions

Question 4

What are the trigger events to make entries?

Answer 4

• purchase of raw materials - in JIT no raw material stock held
• transfer of finished good stock/ sale of goods

Question 5

Advantages of lean manufacturing

Answer 5

• employees focused on making sales
• managers can’t increase profit by stock piling
• reduces documentation recording goods
• labour becomes a fixed cost as labour happens regardless of activity

Question 6

Disadvantages of lean manufacturing

Answer 6

• cannot be used for external financial reporting as WIP should be treated as an asset but doesn’t exist under backflush accounting
  (can claim immateriality of WIP)

Question 7

JIT requirements

Answer 7

• versatile labour force
• ‘kanbah’ information system
• zero defects approach
• strong reliable supply relationships

Question 8

Total quality management

Answer 8

• Computer aided design allows quality to be designed into products
• Computer aided manufacturing allows goods to be produced of consistently high quality
• Product quality is an important competitive weapon

Question 9

External failure costs

Answer 9

costs after delivered to the customer
Eg.
-marketing costs of failed products
- repair cost
- replacement costs

Question 10

Internal failure costs

Answer 10

costs before product is delivered to the customer
Eg.
- cost of scrap
- reworking costs

Question 11

Appraisal costs

Answer 11

costs from insurance of quality standards for materials and products
Eg.
- Inspecting
- cost of set up inspections

Question 12

Prevention costs

Answer 12

costs from preventing products that won’t satisfy customers
Eg.
- staff training
- building quality design into the manufacturing process

Question 13

Measures of cost of quality

Answer 13

• monetary - cost of rectification
• non monetary - number of customers complaints
• traditional variance analysis- favourable price variances indicates cheap materials used so poor quality products

Question 14

non monetary costs

Answer 14

number of customers complaints

Question 15

methods of TQM

Answer 15

• continuous improvement
• employee empowerment
• teams - cooperative ethic
• business process re-enginieering - examine and radically redesign business

Question 16

Features of TQM

Answer 16

• stakeholders work together to achieve customer satisfaction
• managers act as facilitators not controllers
• continuous improvement not static optimisation
• emphasis of prevention of faults not detection

Question 17

Kaizen costing

Answer 17

• making improvements to a process through small, incremental amounts
• applied during manufacturing stage
• increased responsibility of every worker in every activity
• annual or monthly cost goals. (current actual cost becomes base line for new goal)